Making Cents of Financial Aid

I won’t sugar coat it: the college financial aid process is complicated and often confusing for students and their families. There are a lot of terms thrown around, forms to fill out, and different schools have different requirements to qualify for or receive financial aid. So to help cut through all the jargon and hopefully provide some clarity on this process, here is my comprehensive guide to financial aid.

Getting Started

How much a school is going to cost is obviously a big factor when deciding where to apply and enroll. When you’re comparing costs across schools, it’s important to focus on two things. The Cost of Attendance (COA) includes tuition and fees, room and board, meal plan, books, etc. Note that private schools also do not distinguish between in-state and out-of-state students; tuition is the same for everyone. The second thing to look at is Financial Aid and Merit Scholarships: what is the school’s financial aid policy? What kind of merit scholarships do they offer? Generally speaking, private colleges and universities have a higher COA, but they give out a lot of financial aid, bringing the actual cost way down for students. Public schools, on the other hand, have a lower COA, but less funding available for aid. Depending on your family’s financial situation, a seemingly more expensive private school might actually be more affordable once you factor in aid and scholarships.

Money that colleges and universities give out comes in two forms: need-based financial aid and merit scholarships. Let’s break down each one.

Need-Based Financial Aid

Need-based financial aid is funding provided by the government and the school to students based on their family’s financial situation, including income, assets, and how much money they have to pay for college.

How do I apply for financial aid?
If you’re applying for need-based financial aid, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA calculates an Expected Family Contribution (EFC) from the information you provide. Your EFC is used to determine your eligibility for federal financial aid.

Many schools also require the CSS Profile, which is used to determine your eligibility for financial aid from the school itself. Schools will look at your EFC and/or the information from the CSS Profile when they calculate your aid package. 

Anatomy of an Aid Package
What goes into a financial aid package? Here are some of the most common elements:

• Grants: funding awarded by the school or government. The most commonly awarded federal grant is the Pell Grant. Grants do not need to be repaid.
• Work-Study: students who are given a work-study award are eligible to get a job on campus to earn up to that amount to put towards their college expenses. The amount of money in a work-study award is not a guarantee; it is the maximum amount students can earn in a given academic year by working the necessary hours. Students who do not qualify for work study can still get a job on campus. The only difference between a work-study job and other student jobs is that students' salaries for work-study jobs are partially paid for by the government.
• Student Loans: loans given to students and/or parents to help cover the cost of educational expenses. Loans come in several forms and will be repaid with interest after the student has graduated.
  • Federal: loans issued and funded by the federal government. These loans generally have more favorable terms, including a fixed interest rate and the option for income-driven repayment plans. Federal loans do not require repayment until six months after the student has graduated or is no longer enrolled in a degree-seeking program. Subsidized federal loans do not accrue interest while the student is in school, whereas unsubsidized loans do. The limit for federal loans for a first-year student is $5,500.
  • Parent PLUS: loans available to parents/guardians that are issued and funded by the federal government.
  • Private: Non-federal loans issued by a lender such as a bank or credit union. Terms vary depending on the lender.

Admitted students will receive a Financial Aid Award Letter that outlines the different components of their aid package and how much financial assistance they will receive. Note that different schools often use different language to talk about the same thing, so it’s important to pay attention to your award letter. If you have questions, reach out to the school’s financial aid office!

Merit Scholarships

Merit scholarships are awarded based on the strength of a student’s application and how well it meets certain criteria set by each school for their awarding policies. Students are eligible for merit scholarships regardless of their family’s level of financial need, and merit does not need to be repaid. 

Merit scholarships may be based on a variety of factors, including a student’s academic performance, athletic talent, or artistic ability. Schools may require a separate application for merit scholarships, so pay close attention to anything extra you need to do to be considered for these scholarships.

Outside Scholarships

Outside scholarships are those awarded by an organization other than the government or the school. These scholarships can be earmarked for specific student groups, such as those with a specific academic interest (e.g. marine biology), from a certain racial or ethnic background (e.g. Native American heritage), or with a specified career interest (e.g. public service).

A great way to search for outside scholarships you qualify for? Google! Seriously. 

Note that in some cases, an outside scholarship may reduce the amount of financial aid or loans you receive from the school, but it depends on your individual financial situation and the school’s awarding policies. 

Financial Aid and Scholarships at Oberlin

Oberlin’s COA for the 2022-2023 academic year is about $80,000. Is that a lot of money? Yes. Does anyone actually pay the full amount? No. Here’s why:

1. Oberlin meets 100% of demonstrated financial need for every admitted student. Your demonstrated need is the difference between the cost of attending Oberlin and your EFC as determined from the CSS Profile. Typically, 70-80 percent of a student's financial aid package is made up of grants, with the remaining balance composed of work-study and low-interest federal loans. Last year, Oberlin dedicated more than $87 million in financial aid to support students and their families.
2. Every student is automatically considered for merit scholarships; there is no extra application or essay requirement. Any student admitted for the fall of 2023 will receive a minimum of $10,000 a year in merit aid. Many students will receive more than this, but we have to read your application first! So even if you don’t qualify for need-based financial aid, you’re going to get a merit scholarship. Oberlin is test-optional and students do not need to submit test scores in order to qualify for merit.

The Bottom Line

To figure out what a school is actually going to cost you, take the COA and subtract any financial aid and scholarships that you’ve been awarded. Use that amount when comparing costs across schools you’ve been admitted to.

If you have questions about anything financial-aid related, whether it’s how to apply or what something in your award letter means, reach out to the school’s financial aid office. Please. Financial Aid Officers are experts in this process and here to help.